Explain briefly the similarities and differences between your company and its competitor with focus on business activities. (10 points)
Income Statement: Prepare common size analysis for two companies. Compare the composition of their costs, operating expenses, EBIT and net income. Compare their dividend payout and retention ratios.
(20 points)
Balance Sheet: Prepare common size analysis for two companies. Compare the https://keenessays.com/your-taskpadgett-beales-chief-information-security-officer-ciso-has-tasked/ composition of their Assets (what part is Current Assets and what part is Non-Current Assets). Also compare their inventories, accounts receivable and accounts payable, short-term debt and long-term debt. Compare the capital structures of two companies.
(20 points)
Ratio Analysis: compare two companies in terms of liquidity, profitability, leverage and efficiency. Make meaningful conclusions related to the ratio results. Explain which company performs better in every area.
(20 points)
Research the industry performance in year 2022 and summarize the main tendencies. Relate the companies’ performance to the industry trends. Highlight strong and weak points for each company and suggest improvements. Explain how you see the leading company in this industry in the future.
(30 points)
Similarities and differences between your company and its competitor with focus on business activities
Full Answer Section
Once you provide this information, I can perform a comprehensive comparison of the two companies, including:
Similarities and Differences in Business Activities:
- I will identify the main business activities of each company and highlight their similarities and differences.
- I will compare their target markets, products or services offered, and distribution channels.
Common Size Income Statement Analysis:
- I will create common-size income statements for both companies, showing each expense and income as a percentage of revenue.
- This will allow us to compare the composition of their costs, operating expenses, EBIT, net income, dividend payout, and retention ratios.
Common Size Balance Sheet Analysis:
- I will prepare common-size balance sheets for both companies, showing each asset and liability as a percentage of total assets.
- This will allow us to compare their capital structure, composition of assets (current vs. non-current), inventory levels, accounts receivable and payable, and debt structure.
Ratio Analysis:
- I will calculate key financial ratios for both companies, including liquidity ratios (current ratio, acid-test ratio), profitability ratios (gross profit margin, operating profit margin, net profit margin), leverage ratios (debt-to-equity ratio, interest coverage ratio), and efficiency ratios (inventory turnover ratio, accounts receivable turnover ratio, accounts payable turnover ratio).
- This will allow us to assess their financial health, profitability, efficiency, and ability to manage debt.
Industry Comparison:
- I will compare the companies' performance to industry trends and benchmarks in terms of growth, profitability, and market share.
- This will help us understand their relative position within the industry.
Strengths and Weaknesses:
- I will identify the key strengths and weaknesses of each company based on the analysis of their business activities, financial statements, and industry performance.
Recommendations for Improvement:
- Based on the identified strengths and weaknesses, I will suggest potential improvements for each company to enhance their performance and gain a competitive advantage.
Future Outlook:
- I will provide my perspective on the future of each company based on current trends and their competitive landscape.
Please provide the necessary information so I can complete this assignment for you.